First off Social Credit and Fractional Reserve Banking do not go together . Social Credit is a philosophy made by C. H. Douglas. It has nothing to do with fractional reserve banking. I might be wrong. However if you are talking about whether or not fractional reserve banking is a good idea, then yes we can debate about that. If you think about it, Fractional Banking has this thing called the multiplier effect. This, in essence, means that by increases in the money base above the stated reserves, the overall wealth of a country increases. The rational is that by adding more money or credit to the system, more loans can be made to businesses and new start ups that can create more and better products. As an example, a farmer can approach a bank and get a loan to buy a machine that can harvest 1000 plums as compared to the farmer only able to pick 100 plums in the same amount of time. By increasing the plum output, we as a nation are better off...more wealthy. By persuading individuals to store their earnings in a bank (as mentioned above, it first meant the the storage of gold and later on, dollars), the banks are now able to use it to increase wealth. This argument also states that if someone holds onto their gold (say that the person is a hoarder and buries it), it is not wealth. That it really represents nothing, and it certainly is not put to good use.